The Wired 40

Old-school business types found some solace in the bust – at least the upstarts got their comeuppance. Hardly! With the economy finally perking up, newcomers are running the show: Three of the top five companies in this year's Wired 40, our annual list of enterprises leading the charge toward a connected global economy, were founded in the past decade. One-third are less than 20 years old.

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This year's list reflects the churn we've come to expect in the tech economy. Only nine selections appeared on the original list back in 1998. Still, the criteria for inclusion remain unchanged. These 40 leaders have demonstrated an uncommon mastery of technology, innovation, globalism, networked communication, and strategic vision – skills essential to thriving in the information age. Here's how they stack up.

1. Google
ALL THE ANSWERS
Last year: 1
The bigger the Internet becomes, the more it needs search. Dogged by imitators from formidable (Yahoo!) to flaky (Booble), Google has become the central clearinghouse in a world exploding with information. The company's vast hive of servers, purportedly the most powerful private network in existence, not only caches seemingly every page on the Web, but also personal data like email – and someday perhaps music files and more. It's hard to say what the company will call upon this monster rig to do, but you can be sure the Net will be better for it.
Done: Gmail, Froogle, Google Local, Orkut – what hasn't Google done?
To do: Cofounders Larry Page and Sergey Brin need to complete their IPO without betraying their promise to do no evil.

2. Amazon.com
EVERYTHING MUST GO … ONLINE
Last year: 7
The question facing Amazon has gone from "Will it work?" to "What won't work?" The online retailer-cum-global mall now runs more than 35 virtual storefronts selling everything from underwear to live lobsters; there's even a page that accepts campaign contributions. What started with books is fast becoming the Net's premier one-stop shop.
Done: The company has opened its database so other retailers can integrate their stores into the Amazon flow.
To do: CDs and DVDs – yawn. Amazon should capitalize on its peerless customer reviews to sell downloadable music and video.

3. Apple Computer (new)
THE NEW FACE OF CONSUMER ELECTRONICS
They laughed in 2001 when Steve Jobs introduced the iPod, Apple's $400 MP3 player. They laughed in 2003 when he opened the iTunes Music Store, selling songs for 99 cents when millions of consumers were downloading tracks for free. But Jobs is having the last laugh, while creating the kind of platform-and-content synergy that gadget makers dream of. Having sold 5 million iPods, Apple owns 55 percent of the music player market. Meanwhile, iTunes has coaxed the Big Five record labels into a single online store and persuaded fans to download – legally – more than 60 million songs, about 70 percent of commercial downloads. And beyond consumers of digital media, Apple is empowering a new generation of content creators with superior music production (GarageBand) and video editing (iMovie). Put them on the blazing Power Mac G5 and you have the platform of the creative class.
Done: The iPod Mini, released in February, is already taking market share from makers of smaller, cheaper music players.
To do: With iTunes for Windows and the HP-branded iPod, Apple is finally playing well with others. If only it would find more playmates.

4. Genentech (new)
BIOTECH GROWS UP
In the feast-or-famine world of biotech, Genentech has reaped a bounteous harvest, season after season. It was the first to splice genes into fast-growing E. coli bacteria, thereby mass-producing therapeutic proteins, like insulin. Later, Genentech scientist Arthur Levinson advanced the technique by using mammalian cells to manufacture drugs – a standard practice today. Levinson became CEO in 1995, and revenue has since more than tripled to $3.3 billion without a single major acquisition. In February, the Food and Drug Administration approved Avastin to treat colon cancer, a decision that could bring in $2 billion a year – or much more if the drug is approved for other cancers. Levinson has vowed to make his company a leading developer of drugs for cancer and immune disorders by 2010, when he hopes to have won approval for 10 new treatments. With lung, prostate, and ovarian cancers in its sights, as well as arthritis, Genentech is well on its way.
Done: The company enjoyed an unprecedented string of FDA approvals between June 2003 and February 2004: Avastin, Xolair (the first asthma therapy based on genetic engineering), and Raptiva (for psoriasis).
To do: Genentech is ideally positioned to transform bioinformatics, genomics, and high-throughput screening from 20th-century dream into 21st-century reality.

5. eBay
FLEA-MARKET CAPITALISM
Last year: 6
More than just an online auction site turned cultural phenomenon, eBay is an economy unto itself. This year, roughly $30 billion worth of goods will change hands through the company's servers. That will make the auctioneer the 81st-largest economy in the world, just ahead of Kuwait and El Salvador. Not bad for ecommerce.
Done: eBay Motors has become the operation's biggest division in dollar terms, moving $7.5 billion in cars last year, up from $1 billion in 2001.
To do: Fraud has grown so rife that vigilante users are tracking down grifters. The auctioneer needs to police miscreant sellers much more aggressively.

6. Samsung Electronics (new)
A CHIP OF CONSUMER PARADISE
In 1997, in the midst of the Asian financial crisis, Samsung Electronics' new president Jong Yong Yun committed what seemed like an act of corporate suicide. He began sinking billions into research and equipment, vowing to outclass competitors in memory chips and consumer electronics. It was an inspired strategy. Samsung lifted DRAM chips from commodity to value-added item by tailoring them to meet the needs of prized customers like Dell and Microsoft. Then, when the growing popularity of digital cameras and MP3 players spurred demand for flash memory, it quickly converted its memory chip plants. At the same time, the company pioneered voice-activated dialing and was the first to equip cell phones to play MP3s and shoot video. Samsung has not only grown into the one of the most respected non-Japanese brands in Asia, it has become a leading innovator in consumer electronics worldwide.
Done: Samsung introduced a mobile phone with a camcorder and video-on-demand. Then it sold 100,000 of them.
To do: Connect PCs, TVs, hi-fis, microwaves, and air conditioners: Korea, where 70 percent of homes are wired for broadband, is a perfect laboratory for the emerging digital household.

7. Yahoo!
MAKING THE WEB PAY
Last year: 3
CEO Terry Semel is on a mission to figure out what makes money on the Web. His ability to aggregate huge audiences – 263 million and counting – has attracted 70 of the 100 top US advertisers as well as dozens of content suppliers. Yahoo! is where ads meet eyeballs on the Net.
Done: Yahoo! built a new top-notch search engine from scratch, thanks to expertise from acquisitions Inktomi and Overture.
To do: Google has outpaced Yahoo! in search and free email. The Web's oldest brand needs to hone its edge.

8. Electronic Arts
PLAYING TO WIN
Last year: 28
Eat your heart out, Hollywood. EA took in $2.5 billion last year, more than the 10 top-grossing films combined. The company's new LA studio plans to employ 1,000 writers, animators, and assistants, many from the film industry. Games aren't just growing more realistic and interactive; thanks to EA, they've become mainstream.
Done: EA revamped its Internet division, adding 1.8 million subscribers to new online tournaments.
To do: So far, interactive entertainment has taken hold only in games. Movies, music, painting – the field is wide open to EA.

9. Pixar (new)
THE ANIMASTER
In 1995, Steve Jobs predicted in these pages that Pixar would usher in a new era of filmmaking, possibly even supplanting traditional 2-D cel animation. It took less than a decade for his company to deliver, serving up digital crowd-pleasers like Finding Nemo, the highest-grossing animated movie of all time. Between five feature films and a handful of shorts, Pixar has collected a staggering $2.5 billion and 17 Academy Awards – an average of $500 million and three Oscars for each feature. And it consistently keeps 44 percent of what it takes in, an unheard-of percentage in the media industry. Pixar also licenses its technology to others, but its ability to advance digital imagery with each new release keeps it in the vanguard. Pixar's success in movies, along with Apple's in music, has made Jobs the first digital media mogul.
Done: Jobs declined to renew his 13-year-old distribution deal with Disney, prompting would-be suitors to begin a frenzied mating dance.
To do: Pixar needs a distribution partner willing to accept a smaller cut than Disney, yet with enough clout to reach the masses.

10. Cisco Systems
THE "WORK" IN NETWORK
Last year: 11
Tech moguls wondering how to win friends and dominate markets need look no further than Cisco. The hub-and-router king has ruled the network market for a decade with hardly a glance from trust busters. Instead of strong-arming competitors, the company has absorbed clever startups while keeping its workforce streamlined and focused. It's an 800-pound gorilla that fosters innovation rather than squashing it.
Done: Cisco shored up sluggish IT revenue by fine-tuning its wares for voice over IP.
To do: The company has fended off low-cost competitors by offering features that anticipate market demands. How about blocking viruses at the router?

11. Infosys Technologies
GOING WITH THE WORKFLOW
Last year: 34
It's a classic new economy pattern: A nascent company performs a familiar task at lower cost, disrupting an industry but freeing up resources for further innovation. In the case of Infosys, 24,000 programmers worldwide – educated, English-speaking, and paid a fraction of US wages – develop and maintain software for US giants like Cisco and American Express. You wanted lower costs and higher productivity? You got 'em.
Done: Moving beyond India, Infosys has built coding shops in Mauritius and China.
To do: If Infosys can expand throughout the developing world, it will unleash the power of pent-up engineering talent worldwide.

12. Dell Computer
THE GREAT COMMODITIZER
Last year: 15
Dell's formula of assembling on demand and selling directly to the customer turned PCs into commodities. It also made Dell the desktop market leader. The company has since squeezed prices for printers, storage, even plasma TVs. If computers are ever traded in the commodities pit, a statue of Michael Dell should be erected there in his honor.
Done: Following Gateway into the consumer electronics market, Dell now peddles TVs and MP3 players.
To do: A few overpriced markets could use the Dell touch: Cable TV? Wireless access?

13. IBM
IT'S A BLUE WORLD AFTER ALL
Last year: 4
Quick: What's the biggest software company after Microsoft? Maybe Oracle? Perhaps SAP? Wrong. It's IBM, which is using its muscle to propel open standards like Linux into the corporate arena. But IBM is about more than just software – as a force in other markets, such as chips, servers, and storage, it's the all-in-one IT outsourcer.
Done: After acquiring PricewaterhouseCoopers, IBM trained consultants to think like engineers, and vice versa.
To do: IBM routinely wins more patents than anyone. It's time to focus on turning nanotech and bioinformatics into real industries.

14. SAP (new)
SEAMLESS SOFTWARE
Today's economy is hell on the IT department. Companies buy and get bought, swap partners like swingers, and operate in a shifting landscape of new customers and suppliers. All this makes it imperative that incompatible software systems talk to each other about, say, which suppliers offer the best prices for a given part, or what a prized customer bought today. SAP's software stitches these systems into an efficient whole at 22,000 companies in 28 industries. The company's initial focus was enterprise resource planning – in plain English, that's automating basic business activities. But as the firm has grown it has moved into managing databases and customer information, realms dominated by giants like Oracle and Siebel. Competition is heating up, but SAP has an advantage: Shrewd cost-cutting during the IT downturn has left it lean and agile. With 59 percent of the business-software market, SAP is the major player in enterprise management.
Done: SAP won new customers around the world, like Airbus in Europe, Ashland Oil in the US, and New China Life Insurance. Sales to Brazil, China, and India grew at double-digit rates.
To do: Make enterprise software cheaper. Make it easier to install and upgrade. Most of all, make it adapt to the company, not the other way around.

15. Nokia
THE NET IN YOUR POCKET
Last year: 2
Nokia became the leading maker of mobile handsets – nearly two in five now carry its name – just as cell phones were shifting from analog to digital. The challenge is to stay on top as phones evolve into game/email/music/camera devices. The company's effort to gain a controlling interest in the Symbian handset OS is a bold bid to cement its advantage.
Done: The Flying Finn grabbed top market share for GSM phones in China and racked up brisk sales in Brazil, India, and Russia.
To do: Nokia is in a position to dovetail Wi-Fi with GSM and CDMA networks, creating a seamless wireless Web – and tiered price structure – from high bandwidth to low.

16. Netflix
DIGITAL VIDEO SERVER
Last year: 18
When you're explaining to your grandkids what a VCR is, take a moment to tell them about the local video-rental outlet driven to extinction by Netflix. Using the postal service's hoary network, Netflix has turned the rental business on its head and drawn a throng of customers who have remained loyal despite the onslaught of competitors like Wal-Mart. CEO Reed Hastings says video downloads are next.
Done: Netflix posted its first annual profit in 2003 and vowed to double membership to 2.7 million this year.
To do: Who needs parcel post? We want our VOD!

17. Monsanto
REENGINEERING AGRICULTURE
Last year: 32
If Monsanto's genetically modified seeds haven't destroyed the earth, neither have they fulfilled their promise to ease world hunger. New CEO Hugh Grant has abandoned the strong-arm tactics that made his company a pariah. Now his challenge is to transform Monsanto from the only business that dared apply genomics to agriculture to the one that makes hay with it.
Done: Under Grant, Monsanto has won allies in the food industry and begun mending fences with regulators in Brazil and Europe.
To do: Under fire, the company backed away from the notion of growing drugs in GM crops. It's planting season again.

18. Toyota Motor (new)
LEAN, GREEN DRIVING MACHINE
Any doubt that Toyota owns the hybrid-car market vanished in February when, as 1 billion TV viewers worldwide watched, stars like Sting, Jack Black, and Charlize Theron pulled up to the Oscars in (the envelope, please) a Prius. Honda also makes hybrids, and GM and Ford will roll theirs out this year (the latter using Toyota's tech). But with the Prius, Toyota has already captured the hearts of the eco crowd – and made other automakers green with envy. The company, which mass-produced the first part-electric, part-gas powered vehicles in 1997, will boost Prius production by a third this year and transplant its hybrid technology to its Highlander line and the Lexus brand starting this fall. Toyota's innovation extends to assembly lines: Although its plants have been regarded as the industry's most efficient for decades, it recently upgraded them to standardize factory equipment and processes. Now it's studying every component to squeeze out remaining inefficiencies.There's no stopping a company that won't stop improving.
Done: Toyota overtook Ford to become the world's second-biggest automaker in 2003, selling nearly 7 million vehicles.
To do: Why does green have to be a dirty word? Toyota's challenge is to sell Middle America on fuel economy.

19. Vodafone Group
WIRELESS AT HEART
Last year: 9
With 128 million subscribers from Portugal to Japan plus a 45 percent stake in Verizon Wireless, Vodafone is poised to determine what kind of data gets pumped through mobile devices. The opportunity is huge: to create a portable, interactive global network for text messages, music, video diaries, and live news. Oh yeah, and phone calls.
Done: Vodafone narrowly avoided overextending itself by losing to Cingular in a bid for AT&T Wireless.
To do: Enough talk. Make the mobile Internet a reality.

20. Flextronics
HARDWARE ON DEMAND
Last year: 39
Dell, Ericsson, Nokia, and Xerox are among those who have turned the dirty work of manufacturing over to Flextronics. The Singapore-based outsourcer does it cheaper, thanks to high volume and an integrated network of plants from Brazil to Hungary to China. Flextronics brought in $13 billion last year making gadgets like Microsoft's Xbox and HP's DesignJet printer. With that kind of money, who needs glamour?
Done: Flextronics met the downturn by expanding in low-wage countries and emphasizing customer service. The reward: a flock of satisfied tech-giant customers.
To do: Hardware prices would drop even further if the company took on other tasks, like supply-chain logistics and warehousing.

21. InterActiveCorp
LITTLE SHOP OF DILLER'S
Last year: 29
By adding dotcom survivors like Expedia and Match.com to core holdings like Ticketmaster and Home Shopping Network, Barry Diller turned InterActiveCorp (formerly USA Interactive) into a mosaic of consumer indulgences. Diller is strong where Amazon isn't: travel, events, dating, and real estate. That makes a solid foundation for a growing ecommerce empire.
Done: Hotels.com, Hotwire.com, and Lending Tree are the newest gems in Diller's collection.
To do: The quickest way to profits is the shortest path to sales. InterActiveCorp needs to put one-click shopping on TV.

22. Nvidia
PUSHING THE PIXEL ENVELOPE
Last year: 22
The breakneck pace of development in graphics chips makes Moore's law look like a turtle race. Yet Nvidia has pulled ahead of the pack, putting PCs on a par with consoles and preparing the way for high-res 3-D imagery to migrate from games to the desktop, handhelds, and beyond. Chip by chip, Nvidia is bringing fantasy closer to reality.
Done: Sony's upcoming Spider-Man 2 and Warner Bros.' The Polar Express take advantage of Nvidia technology, giving the company an entr�e into Hollywood.
To do: Archrival ATI Technologies snagged the market-share crown briefly last year. Nvidia needs to win it back.

23. WPP Group
ADDING IT UP
Last year: 33
CEO Martin Sorrell wants you to take things personally. He's pushing for personalized marketing – mobile, interactive, and direct – instead of traditional ads, which are about as personal as a hug from Dick Cheney. But Sorrell knows that each of the 102 countries where advertising behemoth WPP operates needs to be spoken to in its own special way. The world may soon be hanging on WPP's every word.
Done: The purchase of British agency Cordiant Communications gave WPP a firm foothold in Asia.
To do: Tomorrow's corporate giants in China, India, and Mexico need a global voice today.

24. Intel
MACRO PROCESSOR
Last year: 14
Intel makes 85 percent of PC microprocessors, but that won't keep it on top in a post-PC world. So the firm is developing silicon for servers, handhelds, flat-panel TVs, and medical gear, and its $4.8 billion R&D budget is funding research in fiber optics, nanotech, and smart dust – especially after its 64-bit Itanium chip was met with a yawn from the market.
Done: Five million PCs were shipped with Intel's Centrino technology in 2003, bringing Wi-Fi to the masses.
To do: The costly fiasco of the Itanium chip serves as a reminder that Intel must satisfy market needs as it diversifies.

25. EMC
MINDING THE STORAGE
Last year: 36
EMC became a tech giant on the strength of immense networked hard-disk arrays. After copycats like Hitachi and IBM piled on, the company branched into software that automatically tags and prioritizes everything from email to video files. The result: Data storage that's fast, cheap, and open to all operating systems – and EMC's return to the vanguard.
Done: EMC cemented its lead in storage software with purchases of Legato, Documentum, and VMware.
To do: Add AI to storage networks. EMC should put a virtual archivist at every employee's beck and call.

26. FedEx
LORD OF THE BRING
Last year: 12
First FedEx eliminated the friction from express mail. Then it applied its world-class logistics to ground shipments, taking on UPS in a market long ruled by the brown trucks. The upshot: in 2003, some 5.3 million packages delivered to 215 countries every day.
Done: The $2.4 billion purchase of 1,200 Kinko's stores extended FedEx's reach into back-office tasks like printing and binding.
To do: Lots of things need transporting. How about FedEx Grocery or FedEx Travel?

27. Microsoft
MONSTER, INC.
Last year: 8
The Goliath of Redmond has a simple mantra: Control the operating system and you control destiny. Indeed, Microsoft's hegemony allows it to set the agenda – on desktops and servers, at least. But the company's taste for monopoly over innovation has attracted a host of persistent Davids, including regulators, virus creators, and Linux developers. Longhorn, the next-generation OS, will test the giant's plan to make its software the operating system for your life.
Done: Bill Gates finally made peace with Sun's Scott McNealy, who had goaded the Justice Department and then the European Commission to prosecute Gates' Evil Empire for antitrust violations.
To do: Given Microsoft's long string of scrapes with antitrust cops, it's time for the company to start competing on the merits of its products.

28. Pfizer (new)
KING OF THE PILL
FDA approvals have slowed – the agency green-lighted only 21 drugs in 2003, down from 56 in 1996 – so Pfizer is packing its pipeline to make sure something gets through. Despite the surging cost of bringing drugs to market, the Viagra maker has 130 new compounds in development, as well as 95 new uses for old ones. It will spend $8 billion on R&D this year, more than double its 2003 profit. But the trick to keep Pfizer growing at last year's amazing 40 percent clip is to combine the company's stellar marketing ability with the innovative spirit found at startups and universities. For instance, it's working with two of the hottest biotech boutiques, Eyetech and Neurocrine, to develop medicines for macular degeneration and insomnia, respectively. With 300 such partners laboring in the background, Pfizer's pipeline will be productive for a long time to come.
Done: Pfizer's successful integration of Warner-Lambert and Pharmacia has given it the best-selling drugs for a dozen ailments from arthritis to depression.
To do: Generally, it costs $900 million to make just one drug. Sounds like the pipeline itself is ripe for innovation.

29. Costco Wholesale (new)
DISCOUNT DELUXE
Who ever thought a warehouse store could be a popular weekend hangout? Credit Costco, the Washington-based big-box retailer whose skill at bringing deep discounts to high-quality goods has turned its cavernous stores into dizzying arcades of consumer fetish. Building on the hyper-efficient supply chain pioneered by Wal-Mart, Costco is putting luxury goods – Barolo wines, Jacuzzi spas, plasma-screen TVs – within reach of a new class of consumers. The combination of bulk sales and membership fees fosters customer loyalty; constant influxes of stylish clothing or fresh food items stimulate impulse purchases. The company also defies the low-wage Gospel According to Sam Walton: Despite paying higher wages, Costco's profit per employee is 22 percent higher than Wal-Mart's. If Wal-Mart has become a blight on small-town America, Costco is the amusement park on the outskirts – the place where all the fun is.
Done: The company piloted a new store specializing in high-end home furnishings and drew up a plan to open these Costco Home outlets throughout the US.
To do: Costco owns the wholesale-club niche while treating its employees far better than the average retailer. Now the company must build on its lead without sacrificing its exemplary standards.

30. Comcast
STRIKE UP THE BROADBAND
Last year: 38
More than 21 million US homes – one in five – get Comcast's cable service, and 5 million log on using its broadband Internet lines. With that kind of reach, CEO Brian Roberts thinks he has a shot at making video-on-demand work, putting pressure on TiVo-like recorders. First, though, he's taking on the Baby Bells by offering dirt-cheap voice calls over IP lines.
Done: Having extended its reach by acquiring AT&T Broadband in 2002, Comcast showed its appetite for content with a bold bid for Disney this past spring.
To do: VOD and VoIP are a good start, but Comcast could really shake things up by launching legal P2P file-sharing into the living rooms of America.

31. Taiwan Semiconductor
THE CIRCUIT MAKER
Last year: 24
Manufacturing microprocessors is an expensive undertaking that can distract innovators from designing better chips. The solution? Let Taiwan Semiconductor do it. Orders from niche players like Broadcom that don't have their own factories, as well as giants like Motorola and Philips that do, are keeping the company's revenues growing 40 percent a year. By making it cheaper to produce ever more advanced chips, TSMC is clearing the way for next year's killer app.
Done: The company broke ground on a new factory in China, helping maintain its majority share of the global foundry market.
To do: To extend its role, Taiwan Semi could move up the value chain, becoming not just the silicon industry's factory but its lead designer.

32. Ameritrade (new)
TRADING PLACES
The bear market did away with many etrading outfits, but it made Ameritrade stronger than ever. In 2003, after years of losses, the company made a $137 million profit, a fitting reward for CEO Joe Moglia's foresight four years ago: After the bubble burst, he moved fast to slash more than one job in three. Then he bought five smaller rivals – including a $1.3 billion deal for Datek in the darkest days of the downturn – and integrated them without increasing head count. As a result, the company executes more online stock trades than anyone in the world, and does it more profitably than E*Trade and Charles Schwab, which found it necessary to expand into mortgages and investment advice. The lesson? Even post-crash, it pays to believe in online trading. As the truest believer, Ameritrade is the biggest winner.
Done: Last year, the company unveiled its coolest tool yet: graphic circles representing stocks that pulse as buy and sell orders are placed. Click on the circle to trade the stock.
To do: Someday anyone will be able to trade any stock from any location at any time. What's the holdup?

33. Gen-Probe (new)
DISEASE DETECTIVE
Technology has done more for treatment than it has for diagnosis. Gen-Probe is evening the score by automating the labor-intensive task of testing blood for diseases like hepatitis and HIV. The benefits: lower cost, higher productivity, and fewer human errors. Unlike blood screeners that look for antibodies, Gen-Probe's machines detect viral genetic material, which is present well before antibodies appear. Its Tigris system allows one person to run 1,000 tests a day, 10 times the rate of other diagnostic devices in use. Tigris won FDA approval last December. Now Gen-Probe is aiming higher: It's developing a screen for prostate cancer that promises to be three times more effective than the competition.
Done: In October 2002, the National Institutes of Health asked Gen-Probe to develop a test for the West Nile virus. Nine months later, it was ready to roll.
To do: Prostate cancer screening is a good start. Now where is Gen-Probe's breast cancer screen?

34. Ryanair
WING COMMANDER
Last year: 30
In eight years, Dublin-based Ryanair has built a no-frills airline that shuttles 22 million skinflints a year to more than 75 European cities, buffeting the Continent's complacent airline industry. The company keeps costs low by focusing on second-string airports and selling tickets on the Web, completing 95 percent of sales online. Ryanair is now the Internet's favorite way to fly.
Done: No reclining seats. No head rests. No window blinds. Ryanair's cost-cutting has been ruthless.
To do: The carrier has a golden opportunity to extend the budget-airline business to developing countries with a growing middle class.

35. L-3
NETWORKED DEFENSE
Last year: 21
Defense contractors don't get edgier than L-3. The company integrates automated equipment with aging machinery, giving new meaning to the term military-industrial complex. CEO Frank Lanza's vision: Unmanned planes delivering precision munitions based on real-time recon while wired warriors stalk the enemy on the ground. War may be hell, but at least it's a connected hell.
Done: Bomb-sniffers and flight recorders are now part of L-3's homeland security toolkit.
To do: Opening L-3's technology to allies would allow for more efficient multilateral forces in global hot spots.

36. Citigroup
WORLD BANK
Last year: 31
Citigroup is the world's banker. It manages accounts for 200 million individuals and corporations in 100 countries. A third of its revenue comes from outside North America, and that's where Citigroup sees its future: serving the rising consumer and entrepreneur classes in the world's fastest-growing economies.
Done: Last year, Citigroup introduced credit cards in Brazil, China, and Russia, and underwrote the $3 billion IPO for China Life Insurance.
To do: Whatever happened to emoney? Citigroup just might have the clout to finally replace cash and cards with a virtual alternative.

37. Level 3
THE LAST FIBER BARON
Last year: 23
What if they built a 22,500-mile digital network and no one came? Slack demand from telcos and ISPs leaves much of Level 3's fiber dark, so CEO James Crowe is selling broadband service in a potentially lucrative new market: voice over IP. If the VoIP business catches fire, it will brighten Level 3's future.
Done: Crowe scored a major deal providing broadband to the federal government.
To do: While Level 3 waits for the market to heat up, its $1.1 billion rainy-day fund will come in handy for buying up rivals at cut-rate prices.

38. Inditex
UP-TO-THE-MINUTE FASHION
Last year: 19
Retailing giant Inditex and its Zara chain of nearly 2,000 clothing stores are household names from S�o Paolo to Singapore but nearly unknown in the US. The Spanish company relies on a globally integrated supply chain to cut costs and time to market. But Inditex faces formidable challenges: Weak sales, currency fluctuations, and savvy imitators like Sweden's H&M threaten the company's future. Time to innovate!
Done: Zara expanded into furniture last year, with 30 stores in Europe.
To do: Inditex's far-flung network is poised to challenge American cultural dominance – first in fashion, then in design at large.

39. JDS Uniphase
LIGHT AT THE END OF THE CABLE
Last year: 40
Of all the tech stars of the '90s, JDS Uniphase was among the hardest hit by the bust. The premier maker of optical networking electronics has weathered hardship well, selling industrial lasers and flat screens while it waits for an upturn. If broadband and voice over IP start to crest, JDSU will be ready to ride the wave.
Done: The company found a strong CEO in Cisco veteran Kevin Kennedy, who is nudging it back to profitability by shaving costs and branching into high-margin businesses.
To do: Why not sell off excess inventory to countries that can't afford fiber? That would establish JDSU's hardware as the global standard.

40. BP
PRIMING THE PUMP
Last year: 26
CEO John Browne believes the world will run out of oil in 40 years. That may seem like a long time, but Browne thinks ahead. He's pushing the oil giant toward solar, wind, and hydrogen. Meanwhile, he touts natural gas as a clean alternative.
Done: BP reduced greenhouse gases by scrubbing emissions from its factories in industrialized nations and promoting unleaded gasoline in the developing world.
To do: Without a push, hydrogen energy won't be available anytime soon. The world's largest oil company could make it happen.

Left Behind

Ten companies were ejected from the Wired 40 this year. Their sin? Failure to meet the global economy's incessant demand for innovation.

Affymetrix
Personalized medicine was the most exciting promise of Affymetrix's microarrays, but the technology didn't deliver.

Cemex
The Mexican mixinghouse reinvented the cement industry in the '90s, but it failed to come up with a compelling follow-up act.

Charles Schwab
The company that democratized investing risks becoming just another knockoff of a Wall Street brokerage.

Check Point Software
The Israeli outfit is no longer the only giant keeping the Internet safe for ecommerce. Cisco, Microsoft, and others have joined in, eroding Check Point's market share.

GlaxoSmithKline
Its dramatic R&D restructuring is finally taking root, but rival Pfizer has excelled in a strategy with more immediate results: licensing deals with the hottest biotech startups.

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